Reality TV star Kim Kardashian has been fined US$1.26 million by the U.S. Securities and Exchange Commission (SEC) for promoting EthereumMax (EMAX) tokens on her Instagram account without disclosing the US$250,000 payment she received for the endorsement.
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- The SEC said in a statement on Monday that Kardashian has agreed to settle and will not promote “crypto asset securities” for three years.
- “The federal securities laws are clear that any celebrity or other individual who promotes a crypto asset security must disclose the nature, source, and amount of compensation they received in exchange for the promotion,” Gurbir S. Grewal, the agency’s director of the enforcement division, said in the statement.
- EMAX, a token that the SEC calls a “crypto asset security,” was worth almost nothing at 10:00 p.m. Hong Kong time, according to CoinGecko data.
- Last year, Kardashian was singled out for endorsing EthereumMax by Charles Randell, then-chairman of the U.K. Financial Conduct Authority.
- In Nov. 2017, the SEC warned that celebrity endorsements of investment products may be unlawful if compensation is not disclosed in promotion campaigns.
- Over in Asia, the Securities and Exchange Board of India said in May that no prominent public figures should endorse cryptocurrencies.
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